Consumer credit still high, regardless of tight measure
Consumer credit still high, regardless of tight measure
JAKARTA (JP): The growth rate of bank consumer credits remained high -- at 31.5 percent in the 1995/96 fiscal year -- despite Bank Indonesia's measure to curb such lending.
According to the central bank's annual report for last fiscal year, the high growth of consumer lending was fueled by sharp increases in credits for the purchases of automotive vehicles and houses.
Last fiscal year's growth of consumer credits, though far lower than the 56.3 percent increase booked in 1994/95, was well above the indicative growth target of 19 percent set by the central bank.
Bank Indonesia has, since early 1994, appealed to commercial banks to curb their consumer lending in a bid to ease high inflationary pressure.
Consumer credits rose by 31.5 percent to Rp 24.7 trillion, or 10.2 percent of commercial banks' total credits, as of the end (March) of the 1995/96 fiscal year, according to the report released here on Thursday.
The working capital credits provided by commercial banks increased by 23 percent to Rp 155.7 trillion, accounting for around 64.2 percent of their total loans as of 1995/96.
The growth rate of the working capital credits was slightly lower than the 23.9 percent recorded in the previous fiscal year.
Investment credits increased by 22.2 percent to Rp 62 trillion, or equivalent to 26 percent of the total loans as of 1995/96.
The total loans rose by 23.6 percent to Rp 242.4 trillion (US$105.4 billion) as of the end of 1995/96. The growth rate was a bit lower than the 24.8 percent booked in the previous year.
Based on economic sectors, 6.5 percent of the total credits were allocated for borrowers operating in agriculture, 0.5 percent to mining, 30.1 percent to industrial activities, 23.2 percent to trading, 28.7 in services and another 11 percent in other activities.
Out of the total bank credits, 39.4 percent were provided by state-owned banks, 48 percent by private domestic banks, 2.1 percent by banks owned by provincial administrations and 10.5 percent by foreign and joint venture banks.
The report said that 80 percent of the total loans were denominated in rupiah and the remaining 20 percent in foreign currencies.
Non-performing
Concerning the quality of the loans, the central bank said that the proportion of nonperforming loans dropped to 10.4 percent of the total credits as of last December, from 12.1 percent at the end of 1994, while the portion of bad (totally unpaid) debts dropped to 3.3 percent from 4 percent.
The number of commercial banks remained the same -- at 240 -- but the number of their offices increased to 6,750 as of March, from 6,655 as of the same month of last year. The number of secondary banks rose to 1,955 from 1,948.
According to the report, the country's banks generally recorded significant progress in the 1995/96 fiscal year on the impact of a rapid increase in the amount of their funds and lendings.
The banks' total assets grew by 30.4 percent last fiscal year to Rp 328.6 trillion as of the end of March. The growth rate was far higher than the 15.6 percent achieved in the previous fiscal year. The portion of the banks' foreign assets also swelled from 11.1 percent to 15.4 percent -- equivalent to Rp 27 trillion -- as of March.
In addition, the banks' total equity increased by 39 percent to Rp 32 trillion as of March, on the impact of the central bank's requirement to increase the capital adequacy ratio to at least 8 percent of their productive assets.
The banks' funds, collected from the public in the forms of deposits, savings and other accounts, increased by 28.7 percent last fiscal year to Rp 223.7 trillion as of March, of which Rp 176.8 trillion was in the form of rupiah and another Rp 46.9 trillion in foreign exchange. (hen)